Creditcard-holders 'must pay'
08/08/2004 21:04  - (SA)  

Johannesburg - Holders of credit cards are responsible for unauthorised withdrawals from their accounts and will have to refund such withdrawals from their own pockets.

This important ruling, which affects every credit-card holder in the country, was made in the Durban High Court by judge J Levinson. He delivered verdict in a court battle between Diners Club and holders of Diners Club credit cards.

Unauthorised withdrawals were made from the card holders' accounts, and they refused to pay. Diners Club went to the high court.

The card holders' argument in court was that the contractual agreement between them and Diners Club is in conflict with the public interest because it contains a clause that indicates card holders are responsible for all withdrawals that require the card holder's PI number.

Such a clause, the card holders argued, is unfair and unreasonable, and consequently cannot be enforced.

In favour of Diners Club Levinson rejected this argument. He found that the specific clause in the contract might be "one-sided and in favour of Diners Club", but that it is totallly justifiable as the issuer of the card has to protect itself after the card has been issued to a client.

"Diners Club must protect itself against the unauthorised use of the card, because as soon as it's been given to clients, Diners Club no longer has control over the card. Moreover, clients aren't under any obligation to accept this clause in the contract, nor are they forced to accept the PI numbers issued by Diners Club.

When they accepted the cards and PI numbers, the clients should have informed themselves of the responsibility involved," the judge ruled.